Monday, July 20, 2009

More on grace periods for resigned members

There's been quite a bit of discussion online recently regarding grace periods on membership particularly around the question of how long you should continue to provide services after the membership lapses.

For many members, the decision to renew or not to renew has been made well before the renewal is sent out based on their experience with the association throughout the year. Renewals themselves are simply a referendum on member satisfaction.

However, the way in which you set up your renewal process can still have a significant impact on your retention rate. In particular, long grace periods can be problematic. If you continue to provide services to a member after their membership has lapsed it does you very few favours.

At the very minimum, you are conveying to a member that they can still get services even without paying. It rarely appears as a generous gesture. More often it comes across as the association being lax in keeping up to date with membership statuses. At worst, word gets around and members start rorting the system and lose respect the association in the process.

A well put together renewal process can abolish the need for all but a small grace period and effectively convey the perception of your organisation as a professional, proactive and efficient organisation.

First of all, it is necessary to give members ample opportunity to renew prior to their membership lapsing. Start sending renewal notices out about three months before the membership lapses. Give member as many opportunities to rejoin as possible before the expiry date.

For example, if a members' expiry date is June 30 the process would be:

February - Member details update - contact members to get their details update. This is particularly appropriate if your pricing model is based on information sourced by members. Provide an incentive to respond by the end of the month.
1 April — Renewal Notice - include an incentive to renew. You may want to put an explanatory note on the early renewals – such as “This renewal notice is a little early. By sending it out early we ensure that those who need to budget for the payment have ample time to do so. We do appreciate early payment as it assists us to budget for member services.”
1 May — Reminder Notice
1 June — Urgent Reminder Notice - including notice that service provision is about to cease.
30 June - Membership expiry date
1 July
— Friendly phone call to member to see what's happening and advise that service provision is about to cease.
15 July — Resigned Notice and cease provision of all services

Members who do not renew should not be deleted from your mailing list unless they are no longer a valid prospect for membership. All resigned members should go straight back into your prospect management process because they have become prospective members once again - although be sure to tag them so they can be treated differently.

Some of the most successful membership campaigns I've ever run have been into resigned member lists. A resigned member doesn't need to know about the history of the organisation, the total range of services or the type of events you run. All a resigned member needs to know is what's changed since they were members.

Marketing to former members is so successful that it should be planned into your renewal process. Consider adding in a process 6-8 months after the member has resigned where they receive a "We want you back" email or letter followed by a personal phone call. Of course, campaigns such as this will only be successful if they are not still on a grace period and receiving services like several associations I've recently come across!

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